Righthaven Loses Again (Yes, Again), With Another Judge... But Immediately Refiles Lawsuit

from the definition-of-insanity dept

Ah, Righthaven. The company has lost yet again, as another Nevada judge has said that the company has no standing to bring the lawsuit. The ruling, from Judge Kent Dawson covers some similar ground to earlier dismissals from Judge Roger Hunt and Judge Philip Pro, citing the Silvers v. Sony Pictures case, which makes it clear that you can't just transfer the "right to sue" over copyrights, and highlighting the agreement between Stephens Media and Righthaven that made it clear that the "transfer" of copyrights was a sham.

Judge Dawson also addresses the "amended agreement" that Righthaven made with Stephens Media on May 9th in its attempt to get around the sham transfer, but the judge doesn't buy it (Judge Pro and Judge Hunt both expressed skepticism about this amendment), noting that it only matters what the facts were when the complaint was filed, and this attempt to change the rules later in the game is not allowed:

This amendment, however, cannot create standing because “[t]he existence of federal jurisdiction
ordinarily depends on the facts as they exist when the complaint was filed.” Lujan v. Defenders of
Wildlife, 504 U.S. 555, 571 n.4 (1992) (quoting Newman-Green, Inc. v. Alfonzo- Larrain, 490 U.S.
826, 830 (1989)) (emphasis in Lujan). Although a court may allow parties to amend defective
allegations of jurisdiction, it may not allow the parties to amend the facts themselves. Newman-
Green, 490 U.S. at 830. As an example, a party who misstates his domicile may amend to correctly
state it. This is an amendment of the allegation. However, that party is not permitted to subsequently
move in order to change his domicile and amend accordingly. This would be an amendment of the
jurisdictional facts, which is not allowed. See id. Here, Plaintiff and Stephens Media attempt to
impermissibly amend the facts to manufacture standing. Therefore, the Court shall not consider the
amended language of the SAA, but the actual assignment and language of the SAA as it existed at
the time the complaint was filed.

Amazingly... Righthaven hasn't gotten the lesson yet, and isn't given up. Almost immediately after Judge Dawson dismissed the complaint, Righthaven refiled the lawsuit, claiming that with its new amendment to the strategic agreement, it now has standing to sue. It will be interesting to see how the judges react here, as they've shown a few signs of getting tired of Righthaven's attempts to continue with this copyright trolling.

Reader Comments

I am glad that Copyright Trolls like Righthaven exist. They are doing something very good, even though they don't want to. By misbehaving this badly, they put themselves on display as one of the worst copyright abusers in the USA. They provide plenty of reasons to reform copyright laws so these kinds of practices should become illegal. They provide reasons for people to demand a stop on copyrights, making public domain and creative commons more popular.
Thank you, Righthaven, for being such an annoying copyright Troll. This will motivate plenty of politicians to come up with some anti-Troll detergent...

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And again. And again. And again. And again. And again. And again. And again. And again. And again. And again.
In the Netherlands there's a saying that even a donkey isn't stupid enough to bump it's head against the same stone twice.
Even a donkey would know when to stop. It makes a nice comparison with Righthaven too. They're both asses...

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Well, the document doesn't say whether it is dismissed either with or without, and apparently my google-fu is weak on finding out what the law says in Nevada on assumption is. Maybe because it is a pre-trial dismissile it is automatically without prejudice. Dunno - I'm not a lawyer.

It does seem odd to me that Righthaven didn't have themselves set up as legal council on the behalf of Stephans Media instead of having the "Right to Sue" signed over to them in a manner that has been found illigal by multiple judges.

the politicians for sure won't ever make any anti-troll legislation since the biggest troll is the MPAA/RIAA. so I do hope some good comes out of this like making it harder to bring real lawsuits for what is in the public best interests!

More bad analysis from a judge who doesn't understand standing in a copyright case. Ugh. When a copyright owner grants an exclusive license to another, that owner still has standing to sue for prior infringements. I'm amazed that none of the judges address this simple fact. I blame Righthaven for not briefing it well enough. Well, that and pissing off the judges so much that they decided to rule against them no matter what their arguments were.

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Not just one judge. But several.

Yes, it's so sad that all these judges just don't understand the way you want it to be.

It so reminds me of SCO. They lost in multiple courts. They complain (in online forums) of biased judges. They appeal that a jury should have decided instead of a judge. They get a jury trial -- and lose. They then appeal asking that a judge should have decided instead of a jury.

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I don't care if Righthaven gets sued off the face of the planet, and in fact I think they probably will, but I still think they have standing under the SAA. This judge, like the other two, has some bad analysis on the point, IMO.

Righthaven's strategy now appears to be changing the agreement every time a judge points to something they don't like. It will be interesting to see how in the world a judge can rule they don't have standing under these new agreements.

Of course, Righthaven still has the problem with the unauthorized practice of law, and I'm really anxious to get a ruling on that. If the assignment-plus-kickback thing is in fact UPL, they're fucked.

This does sound like the SCO thing from what you've told me. I didn't follow that case though. I did read a bit about it on groklaw at your suggestion. Interesting stuff.

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Righthaven's strategy now appears to be changing the agreement every time a judge points to something they don't like. It will be interesting to see how in the world a judge can rule they don't have standing under these new agreements.

This seems like RH and SM are using the courts to fine tune their agreement until they get to a point where it will fly. To me that seems unethical at best and a waste of court resources where the plaintiffs are attempting to make the court an ad-hoc legal adviser.

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I've explained in detail in other threads why I think the judges are getting this wrong. I do my own research and reach my own conclusions, and I'm happy to back up my arguments and explain why I believe what I believe. I've read about 100 cases on standing in copyright cases, and about four dozen law journal articles on the subject before forming my opinion. I doubt the judges did as much.

In this Mostofi case, it appears that Righthaven didn't have the actual assignment document in evidence. That document is where Stephens Media explicitly assigns Righthaven the copyright. Why this wasn't in evidence is anyone's guess. I'm assuming it's because Righthaven dropped the ball again. But given that they didn't have this in evidence, it's no wonder they lost.

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I was signed out. Sorry.

I had said last week that I'm giving Righthaven the benefit of the doubt. I've since rethought my position and now I'm neutral. They get neither a presumption of good faith nor bad faith from me. I don't think they're malicious, but I don't think they're not malicious either.

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It might be better to say that they've got a good case of self preservation, given that sanctions are likely imminent along with losing their business license in Nevada. They HAVE to do this, even though everyone knows it's falling apart...

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Please re-read my post. When multiple judges, on separate cases, all agree on a point of law, then they are correct. By definition. If you think they're wrong, then (obviously) you are incorrect.

That makes no logical sense. It's also possible that the judges simply got it wrong. There's no rule that says when three district court judges say something then it's necessarily, absolutely, inviolably, 100% correct.

I would say it's just as likely that that effect applies to the judges. How much copyright experience do those judges have? I'm sure you can't say.

You do not understand what you think you understand. Others have explained how you are wrong, and the judges in the case agree with them. By definition, you are wrong.

Other people have stated their opinions as I have done mine. To say that by definition I'm wrong on something that's not black-and-white and crystal clear is silly. I have an opinion that is justifiable based on the law. Your mistake is in assuming that there are only two possibilities: right and wrong. It doesn't work like that. Like most things, there are good arguments for either side.

You're arguments are not at all convincing, and I think you have a rather simplistic view of things.

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"That makes no logical sense. It's also possible that the judges simply got it wrong"

It's not possible, and here is why. Judges indirectly make law. The judicial branch gets to interpret the law, not the legislative branch and certainly not you. They do. Their interpretation is, by definition, the correct one whether you like it or not. If they interpreted "do not murder" to mean "murder is ok" they are, by definition, correct. I may dislike that interpretation and think that it's logically and practically wrong, and that the law itself is wrong, but it's still legally correct. If the judicial branch says that you're wrong, they get to make those determinations and they get to say that you are legally wrong. Had the judges agreed with you, you would be right. It's called common law. Judges indirectly make law by interpreting it.

If the supreme court overturns it, then you would be right, because the supreme courts opinions, and the law that they indirectly make, is correct. but if the supreme court refuses to take the case, then, by definition, the current standing is correct. That's how our legal system works.

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So you don't think it's possible that a district court judge can be wrong? That's amazing to me. Believe it or not, but judges get shit wrong all the time. Even supreme courts take up a case, decide one way, and then rehear the case later only to decide the other way. It's not black-and-white like you think.

Just because a couple district court judges interpreted Silvers a certain way doesn't mean their interpretation is correct. I'd like to see what the Ninth Circuit thinks about this interpretation of their precedent. To me, it seems obviously mistaken.

All three branches of government interpret the law, by the law. It's weird that you think otherwise.

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How does the executive branch enforce a law without first interpreting it? How does the legislature create laws without interpreting what they mean? I'm guessing you're also unaware of the fact that most laws in the US are not created by legislatures.

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"How does the executive branch enforce a law without first interpreting it?"

The executive branch is not an authority of how the law should be interpreted, just like you're not.

How do I abide by the law without first interpreting it? The point is that if I interpret the law differently than the judicial branch, then my interpretation is, by definition, wrong. But I can use the judicial branches interpretation to help me interpret the law.

"I'm guessing you're also unaware of the fact that most laws in the US are not created by legislatures."

I'm aware that most of the laws are created by federal agencies, but those federal agencies receive their authority from Congress (the legislative branch). Though I think that Congress should be forced to sign any bill that these federal agencies propose.

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So far, the legal precedent says you're wrong.

You really have a binary view of things. I thing the precedents that exist show the judges here got it wrong. But the way it usually works with something that has no clear, obvious answer is that you try and analogize to precedents to find the best answer. I think the judges here did a bad job of analyzing things, and they seemed to be unaware of some basics as far as standing goes, as demonstrated in their reasoning. If I thought the reasoning was right, I would say so. But I don't. I think the reasoning is flawed, so that's what I'm saying. You insist that I'm wrong, but I don't agree. Cheers.

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Their interpretation is, by definition, the correct one whether you like it or not.

And you do realize that district court decisions are not binding precedent, right? You could have one judge say Righthaven has standing and another one say they don't, even in the same district, even looking at the same facts.

I imagine that whichever one hurts Righthaven is the one you think is "right."

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"And you do realize that district court decisions are not binding precedent, right?"

If appellate courts refuse to take the case then it becomes strong precedent.

"I imagine that whichever one hurts Righthaven is the one you think is "right.""

Not necessarily. I can concede that the law itself is wrong and needs to be changed and that the judges should be replaced to ones that are IP abolitionists so that the laws, and their legal interpretations, are changed.

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Replaced by ones *

For instance, I can concede that copy protection laws last 95+ years. The constitution says that they should promote the progress, I do not think 95+ year copy protection lengths promote the progress and so it should be unconstitutional, but the judicial branch disagrees with me. So, by legal definition, copy protection lasts 95+ years. I think the law is wrong. I think it's a poor interpretation of the constitution and what the founding fathers intended. Though I think the interpretation is practically wrong, it's legally right. Sure, by definition, it's legally correct, but the law itself is wrong. I vote that we replace our legislators and our judges with IP abolitionists so that the laws can be changed to abolish IP.

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And you know what, I read cases all the time where the district court says one thing, a divided court of appeals says another, and then a divided Supreme Court says something else. Sometimes the Supreme Court has nine separate opinions to go along with the judgment. Each Justice thinks their view is correct. But how can that be? Under your narrow world view it couldn't, but in the real world, it's just how it works.

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If someone had an argument backed by caselaw and doctrine that settled the issue, I'd gladly admit that their argument is better than mine and concede. So far, I've only seen sloppy analysis that's unconvincing. Sorry, but that's my opinion.

I don't think you're going to convince me with "50 people say it." Convince me with a better argument. If 1,000 people said one thing, and one person said something else, I would agree with the one person if my own research and analysis told me that one person had the better argument.

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And I think you need to take into account the motivations of those saying it. I believe that most people hate Righthaven and will just agree with whoever has an argument--any argument--that's bad for Righthaven. That's not how I approach this. I truly don't care if Righthaven sues every last blogger into the ground or if Righthaven is all arrested tomorrow and sentenced to death row. I honestly don't care either way. I only care who has the better argument.

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Whether their legal position is flawed is a matter of debate. As far as hurting innocent people goes, I disagree. Let's not forget that there's evidence that the defendants are tortfeasors. You may disagree with copyright laws, but it seems clear to me that most of these defendants got themselves into this mess in the first place.

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These judges have not appeared to me to know what they're talking about when it comes to standing in a copyright case. For example, they do not appear to understand the basic idea that even though a licensor grants an exclusive license to another, that licensor still has standing to sue for infringements that happened prior to the licensing. That's a well-supported position in the caselaw, yet these judges seem oblivious to the concept. Another example would be the judges' treatment of fair use that appears to differ from almost all of the other fair use jurisprudence that I've read. (See, for example, Judge Pro citing the "Sony presumption" like it's good law when the Supreme Court explicitly said later that the "presumption" doesn't mean what Judge Pro thought it means.)

I think you need to face the POSSIBILITY that perhaps copyright just isn't these judges' strong suit. Judges aren't masters of all areas of law, you know. Apparently you think that once three judges say something (even if the other judges are just going off what the first said) then res ipsa loquitur that's gospel truth. It doesn't work that way. See any appellate court case where a district court was reversed for evidence of this.

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"they do not appear to understand"

You do not appear to understand that it's not your position to determine how the law is interpreted, it's their position. They can interpret it however they want and what they say is legally true because they said so. It's called common law precedent.

"even though a licensor grants an exclusive license to another, that licensor still has standing to sue for infringements that happened prior to the licensing."

The judges disagree and so this is, by definition, not true. The judicial branch interprets the law, its interpretation (and not yours) is, by definition, legally correct. If the judicial branch says that you're legally wrong then its true because that's how the constitution configures our legal system.

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When did I ever say that it's my "position to determine how the law is interpreted"? I didn't. I'm merely expressing my opinion about what I think the proper interpretation of the law is in this case. These are comments sections where people are invited to express their opinion. That's what I'm doing. If you don't like my arguments, then explain to me how they're wrong.

Again, just because one judge interprets something one way, that doesn't mean that that is the gospel truth. Did you ever notice how appellate courts reverse district court judges? They get reversed because the appellate court thinks the district court got it wrong. It happens all the time.

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You are right, judges get it wrong all the time. But when you have all the judges agree with law professors and 99.99% of legal observers, it means your version of the law is most probably flawed. Perhaps a nominal transfer that lasts for a nanosecond is not sufficient to assign an exclusive right under the Copyright Act. Maybe you need more than just a paper transfer of ownership to establish standing for bringing suit. It may be that for policy reasons courts don't want to encourage lawsuit factories whose sole purpose for existence is to sue bloggers. Or maybe judges hate slimy lawyers like Gibson and Mangano. Who knows?

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99.99% of legal observers? Just about the only written analysis of this I've seen has been by judges. Where's all of this other analysis?

If the decision was based on policy reasons, they should have said so. Instead, IMO, the rulings are based on bad reasoning. Perhaps the right answer is that Righthaven doesn't have standing. That's fine with me. I just want the reasoning that reaches that conclusion to be solid. And so far, it hasn't been.

It certainly looks like the end is near for Righthaven. I think the UPL argument will shut them down for good here shortly.

As far as what I said above about the defendants, let me elaborate. I think most of these defendants probably should be liable for infringement. I don't begrudge Righthaven for attempting to bring suit against them. It certainly appears though that Righthaven has not been keeping their nose clean. Judge Hunt ruled today that Righthaven intentionally misled the court. I have no sympathy for that.

Break copyright laws, I don't have sympathy. Lie to the court and conduct UPL, I don't have sympathy.

If it is UPL, then I do have sympathy for the defendants as being the victims of UPL. I won't be the least bit surprised if this ends in a big class action against Righthaven for a whole host of wrongs, and Righthaven will be put out of business. I also think that MediaNews and Stephens will be on the hook for what Righthaven has done, and rightfully so.

In the end, it appears that the standing issue really won't matter since I think the UPL argument and the claims against Righthaven are where this is all heading.

Nonetheless, I think it's elementary that a party can assign its copyright and accrued right to sue to another party, and then that first party can be granted a license back while leaving the second party with standing. Nothing in Silvers says that's not OK. Nothing in the Copyright Act says it's not OK.

Righthaven going down in flames is probably the right outcome here, but that doesn't change my mind that the standing and fair use rulings have been poorly reasoned and wrong.

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But regardless of the statue's provisions every plaintiff must have suffered injury-in-fact in order to have standing in a federal court. Congress does not have the power to abolish Article III's standing requirements. Righthaven has not been injured by the alleged infringers, and that is why it can never establish standing.

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And yet the accrued right to sue is transferable and may be exercised by the transferee, as long as they are transferred the underlying right. Standing doctrine in IP works somewhat differently than regular Article III standing. None of the judges said there was no standing because there was no injury in fact, and I think for good reason. I should note too that the Ninth Circuit's holding in Silvers is not the universal rule, and many think the court got it wrong.

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Every federal court's jurisdiction is subject to Article III standing requirements. As such, every plaintiff must prove injury-in-fact. There is no such thing as a different standing doctrine for IP actions. You can either show injury-in-fact or you can't. Righthaven actually benefits from infringements so it can never prove injury was caused by a defendant.

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I'm not sure you make the argument that Righthaven doesn't have standing over the copyright that they were assigned. An owner of a copyright has standing. It matters not if that owner granted another a license. If they didn't grant their exclusive licensee the accrued right to sue, it remains with the owner and may be exercised by them.

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What I am saying is that regardless of what the statute says, a plaintiff must prove injury-in-fact to have standing in a federal court. Righthaven must still show how it has been injured as a result of the alleged infringement. Since a copyright infringement action sounds in tort and Righthaven is not enforcing a contractual right to payment that may be freely assigned, without proof of injury there can be no subject matter jurisdiction.

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My understanding of it is a bit different. Certain rights are transferable, including the right to sue for copyright infringement. When you transfer to someone else your right to sue for infringement, and they exercise that right by bringing suit, they are suing in your place. They step into your shoes. So in this case, Righthaven steps into the shoes of their assignor, being Stephens Media or whoever. I'll admit I haven't researched this much and I don't know the specifics, but from what I've read this is the gist of it. I think the proper way to look at it is that Righthaven is standing there in their assignor's shoes, and if their assignor would have standing, then Righthaven necessarily does too.

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The requirement that a right to sue be transferred only in conjunction with a transfer of the underlying exclusive right is premised on the notion that a genuine assignee of a copyright right has been injured as a result of the past infringement and hence it has Article III standing to sue. Without some showing of injury there is no subject matter jurisdiction.

I'm not sure the purpose matters in copyright law. I buy that purpose matters for UPL, but I'm not aware of how it matters in copyright. Where does it say that if you're assigning the copyright so the assignee can bring suit, then it's a sham?

I never said that. But if you structure a copyright transaction with the sole purpose of transferring only the bare right to sue, then the paper transfer of ownership is a sham. The parties never intended to transfer true ownership.

I see. But that's where the argument loses me. I don't think they structured it so that only the bare right to sue was transferred. Ownership transferred as well. That's why I think Silvers is distinguishable. Silvers only says you can't transfer the bare right to sue. It doesn't say you can't have a contract where ownership transfers but there's also a license back.

I don't see how it's a sham. The reason you don't let married couples do it is because they are doing it for the purpose of not paying a creditor, i.e., not making the victim whole. That's against public policy.

The only difference here is that the wrongdoer is paying his debt to his victim's transferee. What public policy reason prevents this? What's important is that the tortfeasor pay for his wrong, not who he pays.

"Silvers only says you can't transfer the bare right to sue. It doesn't say you can't have a contract where ownership transfers but there's also a license back."

Then you say that you support people twisting the words of a law to bypass the intent of the law. Re-read this, and think about it. They 'bought' the rights, then in the same agreement immediately licensed, exclusively, all those rights back to the people they purchased the copyright from. THIS is where most of us are seeing an issue with that first contract. It is so transparent a scam to most of us that it just boggles the mind that they thought they'd get away with it.

Incidentally, this is why a lot of people don't like lawyers, either. There are some really good ones out there, but the word weasels tend to darken the name far too easily.

The public policy, as enunciated in Silvers, is to prevent the commoditization of copyright infringement causes of action. Whether or not you agree with this reasoning is irrelevant because Silvers is the law of the land and it does not approve of copyright holders selling lawsuits. Everyone seems to comprehend this concept but you.

I'll add too that I think that other circuits don't have the requirement that the underlying right be transferred with the right to sue. What I gather from this is that the plaintiff in such a case--a transferee of the bare right to sue--would have standing because he's stepping into his transferor's shoes. The injury in fact happened to his transferor, not to him. He has standing because he's standing in the shoes of someone who has standing, despite the fact that he otherwise would not have standing. Along those same lines is the notion that what matters is that the tortfeasor make good his wrong. That brings about balance in the tort. Who owns the underlying property that was infringed or the right to sue thereon doesn't matter. What matters is that the tortfeasor rights his wrong and that balance is restored.

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I think it makes sense like this: the value of the copyright is diminished by the infringement; Righthaven owns a copyright that's been infringed; Righthaven brings suit for the infringement; the defendant makes Righthaven whole. I get the argument that the infringement is a value to Righthaven, but I don't see how that possibly matters.

I think you have to take a step back and look at the bigger picture. The copyright--the property itself--has been infringed. When the defendant makes the plaintiff whole, the copyright is no longer diminished. This is the idea behind the tort of copyright infringement. So what if ownership of the right changes hands between the infringement and the making whole? What's important is that the tortfeasor is only liable to make whole his victim once. Whether the plaintiff he makes whole is actually the victim, or his victim's assignee, makes no difference.

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As a normal citizen, I don't care about the legal details. I just want to license some of Righthaven's intellectual property. I've been trying for months to contact them to get permission to reproduce some of the articles they own. They never reply.

If I didn't know about all of these lawsuits, I'd think they weren't even in the business of licensing their valuable content.

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I find the amended section 9.3 interesting.

SAA:
blah blah, Stephens Media shall not grant any encumbrance on any SM copyright... notwithstanding... it shall not be a breach of this agreement if SM... encumbers all or substantially all of its assets... blah blah

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I think they're trying to find the minimum amount of rights that can be transferred to Righthaven while still imparting standing. At the rate they're going, it's going to take a while, and they'll probably run out of resources before they find the magic agreement. They really should just assign the rights to Righthaven outright, with a non-exclusive license back. Period. All that other funny stuff just looks bad.

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. . . before they find the magic agreement . . . .

As I see it, there "magic agreement." What's become apparent through all these briefs and orders is that the SAA has no substance. Some of the rulings have hit on this point. Drafting the "perfect contract" still won't do Righthaven any favors, as what matters is how their relationship operates in the practical world, not the world that exists on paper.

Re: When a copyright owner grants an exclusive license to another ...

@FUDbuster: "that owner still has standing to sue for prior infringements".

Does that apply even when the buyer of the copyright knowingly buys damaged goods? Surely in this case the sale price already incorporates the effect of the damage done by infringement (whatever it may be). It seems like the law shouldn't allow the buyer to get double the value of the infringement, first in the discounted price and then in court.

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I get what you're saying, but I don't think there's anything in copyright law that says that. The point of allowing an assignee to sue for infringements that happened when his assignor held the copyright is to make that assignee whole. Here, the assignee is only getting the copyright because it's damaged goods--the value to Righthaven in the copyright is the infringement. It's an conundrum since that's the opposite of how it usually works. But I'm not aware of anything in the Copyright Act or caselaw that disallows it.

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"In the court’s view, the arrangement between Righthaven and Stephens Media is nothing more, nor less, than a law firm — which incidentally I don’t think is licensed to practice law in this state — with a contingent fee agreement masquerading as a company."